Relief in Calif. as summer blackout threat recedes
By Michael Kahn
SAN FRANCISCO, Sept 9 (Reuters) - It was supposed to the
Summer of the Blackout, a California blockbuster that would
short-circuit the state's vaunted economy with power cuts,
massive job cuts and a price tag of tens of billions of
dollars.
But as summer grinds toward its official end on Sept. 21,
it looks like the Golden State may squeak through the hottest
days of the year without going dark.
"I think everybody feels California dodged a bullet," said
Ellen Vancko, a spokeswoman for the North American Electric
Reliability Council, which had projected the state's 34 million
residents would see 260 hours of blackouts this summer. "We
were very lucky."
California -- the world's sixth-biggest economy -- has
managed to keep the lights on since May 8 when operators of the
state's power grid unplugged tens of thousands of customers in
what turned out to be the last of six rolling blackouts that
began in January.
Going into the hot summer months, officials warned state
residents to expect more of the same, prompting homeowners to
buy generators, police to draw up emergency management plans
and politicians to lay blame.
But no blackouts have occurred.
Some of the factors that helped California scrape through
included a sharp drop in natural gas prices, a softening
economy that lessened the demand for power and greater
conservation efforts, officials say.
But far and away the biggest factor was the weather, which
failed to deliver the kind of drawn-out heat waves that strain
electricity supplies when consumers crank up their air
conditioners.
"If we had had a normal summer we are pretty certain we
would have had blackouts," Vancko said.
Severin Borenstein, director of the University of
California's Energy Institute, agreed that weather was key,
although he pointed out the state still tip-toed on the verge
of blackouts a few times during the summer.
"We got lucky," echoed Borenstein. "We needed a break from
somewhere and we got it from Mother Nature."
IT AIN'T OVER TIL IT'S OVER
Still, no one is saying California's energy crisis is over,
and officials warn that September and October could bring
enough hot weather to tip the energy grid into emergency at
least one or two times -- not a summer-long crisis, but a
definite inconvenience.
More daunting, the state is still grappling with the
aftermath of a bungled 1996 deregulation scheme that was
supposed to bring lower power prices and more consumer choice.
Instead it sparked soaring wholesale power costs, the
bankruptcy of the state's biggest utility and six days of
rolling blackouts between January and May.
The energy crunch also drained the state treasury of more
than $7 billion for emergency power purchases and spurred the
California Manufacturers & Technology Association to predict in
May that a long summer of blackouts could cost California's
economy almost $22 billion and as many as 135,000 jobs.
But in a recent update to that report, the manufacturing
group said higher electricity costs have caused only a handful
of firms to shut down plants or cut jobs.
The brightening energy picture has also lifted the fortunes
of Gov. Gray Davis, who has staked his political future on
beating the blackouts, stabilizing California's shaky energy
markets, and rescuing the state's second largest utility from
the threat of bankruptcy.
"We are cautiously optimistic we will be able to continue
to avoid blackouts," said Davis' spokesman Steve Maviglio, who
added that the governor's push for more power plants,
conservation and lower-priced long-term electricity contracts
have done much to prevent outages.
"The combination of all those factors combined to help us
escape what all the naysayers thought was going to be the
governor's doom," he said.
NEXT PROBLEM? WINTER
Officials and some industry experts warn the next big
hurdle is winter, which brings increased demand for power for
heating homes and businesses.
California had a tough energy fight last winter when the
state endured blackouts and daily emergency calls to conserve
power as natural gas prices soared and many generators shut
down because they weren't getting paid by cash-strapped
utilities.
"People shouldn't believe that we don't need to pay
attention to our energy situation because we didn't have
blackouts," said the Reliability Council's Vancko. "We are
still in a very tight situation."
((Michael Kahn, San Francisco Bureau, 415-677-2511, fax
415-986-5147, michael.kahn@reuters.com))
REUTERS
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